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China likes our milk at $23 a bottle

15 Mar, 2014 5:30am

3 minutes to read

Prime Minister John Key with Bruce Pulman, owner of Green Valley Dairies Limited, the company which supplies milk to Oravida. Pulman says he has wanted to add value to his product through exporting for a long time.

Oravida shows just how the reputation of what's produced here can translate into major trade.

At $23 for a two-litre bottle of milk, the Shanghai supermarket price of Oravida's prize export is well beyond what any Kiwi could expect to pay at the local dairy.

But the high-price reflects a more complicated supply chain - and the degree to which the high-quality product is sought after in China.

It's just one of a string of products which are or will be sold into China by Oravida, the company to which Cabinet minister Judith Collins has such close personal connections is also the embodiment of how New Zealand's Free Trade Agreement is meant to work.

The popularity is such that the company is even considering getting its own plane.

Fresh local milk in Shanghai sells for $2 to $3 a litre. The popularity is such that now "it wouldn't be unusual to have a five ton shipment".

"We're not sure the airlines can keep up. I'm serious - the next discussion we're having is to charter aircraft to freight product to China."

Oravida's corporate network is a spiderweb of companies which end in a lawyer's trust. The names of the companies - and the company website - show an interest in exporting products such as beef and lamb, fruit, honey (it owns 5 per cent of Comvita), milk, seafood and swamp kauri. Currently, its exports are restricted to milk and Sanford's seafood - specifically salmon and scampi.

National Party president Peter Goodfellow is among the National Party people featured on Oravida's website.

He is a large shareholder in Sanfords, which supplies salmon and scampi to the company for export. The scampi sells for $180 for 2kg in Shanghai.

He pointed to the FTA when talking about Oravida. "What National has done is to attempt to use that free-trade agreement to really drive jobs creation and exports and imports from China."

Trade Minister Tim Groser is the most explicable of the many National Party worthies who have appeared at Oravida's events. One event at which Oravida's scampi was featured was a seafood and wine function in Shanghai in 2011. He told the audience: "If you are looking for the cheapest product, New Zealand is not the place. But if you are looking for products that offer best value for money, you will find such products everywhere in New Zealand."

Mr Groser told the Herald he was speaking to a range of exporters and their Chinese clients and distributors. "New Zealand is renowned for producing high-quality, safe and sustainable food and beverage products."